Buffett’s Berkshire Hathaway Will Market US Homes in China

Second largest US brokerage chases after Chinese investors.

Marketing US homes to Chinese investors living in China is good business, and some US brokerages have specialized in it. But now it’s big enough for Warren Buffett. “Warren Buffett,” “Berkshire Hathaway,” and “Coca-Cola” are well-regarded brand names in China. So all that was needed was a major Chinese platform to market American homes to Chinese investors under those names, on a scale never seen before. And voila.

Berkshire Hathaway HomeServices, a subsidiary of HomeServices – the second largest residential brokerage in the US, according to its website – which is a subsidiary of Berkshire Hathaway Energy, which is a subsidiary of Berkshire Hathaway (or something like that) announced on Monday that it had inked a marketing agreement with the Chinese property portal Juwai.com “to syndicate all of its franchisees’ residential listings.”

Juwai.com claims to have “roughly two million visitors monthly.” That’s a lot of Chinese investors that might go shopping for some American residential property.

Millennials in Vancouver, Canada, have already felt the full benefit of Chinese investors. As home prices have skyrocketed beyond the reach of Canadians, the government of British Columbia imposed a transfer tax in August last year targeted straight at non-resident investors. It didn’t take long for these non-resident investors to show up further south, according to Bloomberg:

About half of the homes sold in Seattle’s suburbs are going to Chinese buyers, with many of the transactions requiring the use of interpreters, international banks and multiple escrow deposits, according to Dean Jones, chief executive officer of Realogics Sotheby’s International Realty. That’s up from about 30 percent last year, he said.

“This is Vancouver 2.0,” said Jones, who lived in the Canadian city about two decades ago, when the capital flow from Asia started to accelerate. “A lot of the same motivations and goals are being replicated in Seattle.”

Now favorite Uncle Warren Buffett is going to make it a lot more convenient for Chinese investors to find just the right home in the US, jack up prices by creating nearly unlimited demand, and buy what plain Americans can no longer afford to buy.

HomeServices of America, according to its website, is the second largest residential brokerage the US, with “nearly 30,000 real estate professionals operating in nearly 600 offices across 28 states,” facilitating over $94 billion in residential real estate sales in 2016. It has a network of over 375 franchisees with over 46,000 agents. And its listings are going to be advertised in China.

There’s more in this propitious announcement:

Berkshire Hathaway HomeServices also launched a banner advertising campaign on Juwai.com to promote its brand, home page and listings to Juwai.com’s audience. The alliance makes Berkshire Hathaway HomeServices a dominant brand on one of the world’s most popular real estate search sites.

And more, from Gino Blefari, CEO of Berkshire Hathaway HomeServices:

“The Chinese have overtaken all nationalities besides Americans as the leading buyers of property in the US. Our efforts through Juwai.com, and through existing marketing agreements with The Wall Street Journal/Asia and Mansion Global Wechat Channel, make it much easier for Chinese real estate buyers to find and shop our property listings.”

The portal says it attracts “high-net-worth consumers who are ready to buy homes in the US.” It “hosts its sites and services on both sides of China’s ‘great firewall,’ enabling Chinese consumers access no matter where they live and buy.” So this is going to be a hassle-free transaction.

You can already check out some pricey American homes under Berkshire Hathaway’s brand on Juwai.com, though it’s helpful if you can read Chinese:

For example, Juwai.com lists this flagship 7-bedroom, 13-bath house on 1690 San Remo Drive, Pacific Palisades, CA, at $38 million:

The house has a Zillow estimate (“Zestimate”) of $31.4 million. It was first listed in May 2016 for $42 million by Berkshire Hathaway, but failed to sell. The listing was pulled in November – and relisted in February 2017 at $38 million. Maybe a Chinese investor will bite.

Kerry Donovan, VP of Marketing for Berkshire Hathaway HomeServices, put it this way in the press release:

“Our listings and banner ads are on display inside and outside of China. This is a huge differentiator for us.”

“We will continue refining our global listing-syndication program to bring the most value to our domestic franchisees based on international buying activity and search patterns. Juwai.com is an important step toward our overall strategy.”

So it’s official. Homes in America are a global asset class. Warren Buffett is going to get his cut on those transactions. Perhaps he can fund the purchase through a mortgage from Well Fargo, sell buyers a homeowner’s insurance from Geico, add some electricity from one of his utilities, and so on. Hopefully Chinese investors, of which there are many millions, will blindly dive into the US market to create some new demand and drive home prices further into the sky. It would make everyone happy. What worked in Vancouver and Toronto can certainly work anywhere.

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61 comments for “Buffett’s Berkshire Hathaway Will Market US Homes in China”

John Doyle

Apr 17, 2017 at 11:15 pm

Money has its own morality, eh?
I did read that Vancouver seeing the resulting slump in sales from the tax, has made concessions in other areas to make up.
It’s all still going gangbusters here in Sydney and we don’t need Buffet’s efforts to help.

Gershon

Apr 18, 2017 at 7:37 am

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte, Emperor of France, 1815

TJ Martin

Apr 18, 2017 at 8:47 am

Yeah aint this just grand ? Not to mention the very epitome of hypocrisy . One minute Buffet’s trying for all he’s worth to convince us how ‘ altruistic ‘ he is , how ‘ Liberal’ he is and how much he cares about America [ while sitting on his thumbs during and after the election ] … the next he’s selling the rug out from under our feet to the Chinese .

And yeah just as it was on the verge of coming back down to reality this’ll do the Denver real estate market a whole lotta good .. for Buffet and his minions that is . This reminds me of the Prog Band Genesis’s song ” Selling England but the Pound ” … only now its Buffet selling the US by the square footage for thirty pieces of Yuan . The ‘ Judas ‘ reference being completely intentional

Ahhh the joys of blatant Neoliberalism verging on Anarcho – Capitalism in the disguise of Altruistic Liberalism . Seems ole Warren’s been brushing up on his Gospel of Ayn Rand studies of late .

And thank goodness we didn’t invest with Buffet … the very thought of being a part of this despite the potential profits turning my stomach as I bang this out . Pardon me for placing morality above profit .

RD Blakeslee

Apr 18, 2017 at 9:40 am

Oh goody!

Several of Tj’s latest posts didn’t mention Ayn Rand, but now SHE’S BACKKKKKKKK…

TJ Martin

Apr 18, 2017 at 1:10 pm

Face the facts Blakeslee . Like it or not .. and whether you understand it or not .. you need to come to grips with 1) Who Ayn Rand was and what her philosophy of Objectivism is and what the consequences of her ideologies are … and 2) The hard core undeniable fact that from congressman to senators … from businessmen ( and women ) to clergy … the Gospel of Ayn Rand is now the predominant philosophy across the whole of the US . So rather than snarky criticism .. try taking the time to do a little reading and research as to why her name comes up in several of my comments . Gee .. research and reading versus Twitterish snark . What a concept .

Intosh

Apr 18, 2017 at 10:15 am

What do you expect from a man who tells the world he drinks Coke every day and who owns mosanto, goldman sachs stocks? Obviously, his god and his moral is Money.

Frederick

Apr 18, 2017 at 10:48 am

Uncle Warren sure seems like a nice guy He sure does a good job of pulling the wool over people’s eyes He’s the Wolf in sheeps clothing for sure

chip javet

Apr 18, 2017 at 10:09 pm

All this angst because Berkshire opens a real estate firm? Geez.

So SJW, what would you propose to have Buffet do? Let’s hear your idea of the perfect financial life.

Ricardo

Apr 19, 2017 at 8:06 am

Correction: “Selling England By the Pound”

Bobber

Apr 17, 2017 at 11:35 pm

People who buy products from China need to realize that the Chinese are using those profits to bid up home prices in the United States. The cheap Chinese products are not such a good deal when you view it that way, unless you are a homeowner already.

Lee

Apr 18, 2017 at 12:28 am

Well with fewer restrictions on RE purchases in the USA by foreigners, I’m surprised that this type of marketing wasn’t done sooner.

However, all that being said, how in the world are the Chinese going to get the funds to the USA to buy some of those properties? There are now tough capital controls being imposed.

The price on those houses makes Oz look cheap!

As an aside, people seem to forget the here in Oz we have all sorts of restrictions on what type of RE foreigners can buy. It isn’t a ‘free’ market like in the USA.

This type of marketing has been done for a long time but by smaller specialized brokerages, usually with bilingual staff and representatives in China. This deal by the second largest brokerage in the US moves the marketing efforts in China to an entirely different level.

Tom Stone

Apr 18, 2017 at 10:59 am

Wolf, there’s actually a Berkshire Hathaway office here in Sebastopol ( One of almost a dozen Brokerages in a town of 8,000).
However, there hasn’t been anyone holding it open for six months or more…It’s a good location that would get some walk in business if it were open regularly.
For some reason, no one wants to.
FD, I’m a Broker associate working for a different outfit in town.

JZ

Apr 18, 2017 at 1:57 pm

Chinese Communist Party is imposing lots of capital controls on how domestic entity and citizens could dump yuan and move to world wide. They just printed so much yuan and has the exchange rate fixed. It is not a rocket science to figure out dumping the trash and buy real stuff denominated in less trashy currencies.

I think Warren is trying to solve this problem. If he can take payment in China and hand over a house in US and do the dirty work of money moving, this adds a lot of value to those Chinese folks holding printed yuan paper but under capital control.

Ole

Apr 18, 2017 at 10:29 pm

Think with large scale, and good connections and consultants, this can be done. Without breaking the laws, and using loopholes. Just some kind of very simple set up. 1) Chinese buyer buys a house in US, and pays in yuan to local company A in China. No capital controls, local transaction. 2) US company “B”, that buys staff from China, usually pays to Chinese company “C”. Now, add here a company D in US, that will work as a middle man.
And voila. Company B will pay to company D, company A will pay to C, and companies A and D will do cashless liabilities swap.

deangelo

Apr 18, 2017 at 12:32 am

Instead of blaming the Chinese, why don’t Caucasians blame people like Warren Buffet, who is a greedy old man trying to pass himself off as some good ole, down to earth coke drinking, McD eating innocent old man? This is guy is straight corrupt. He knows what this will do to home prices in America which is already a huge bubble and things were starting to deflate. But oh no, Warren can’t have that, it means regular Joes like me might actually have a chance at buying a home until this ridiculous, greedy endeavor. The thing that should really upset the common man is, this greedy old man who knows that it will really drive up the price of homes here and price out most hardworking Americans but he doesn’t care. There are other ways of making money Warren. For once Buffet should act like a decent human being and seriously take into consideration the plight of regular Americans. It’s simple for all of you who are always blaming the Chinese, have greedy jerks in Wall Street like fake nice old man Buffet, to stop doing thing like this!!

RD Blakeslee

Apr 18, 2017 at 7:51 am

Oh, but you must understand: People like Buffett and Bill Gates are “giving it all away” to “foundations”.

Where does it go from there (besides for the care and feeding of the bureaucrats who run the “foundations”)?

To “help” the “dispossessed” all over the world – very little to U.S. citizens.

So, our country’s real estate is sold away, but it’s to help all the world’s “poor”, don’t you see?

You are “insensitive” if you are unwilling to be dispossessed of the ability to buy yourself a house.

Gershon

Apr 18, 2017 at 8:52 am

Gates, Buffett, and their oligarch pals are all about open borders and unrestricted immigration. Makes for docile wage slaves, maids, and lawn boys.

TJ Martin

Apr 18, 2017 at 8:53 am

Errr .. the more relevant criticism to be aiming at both Buffet’s and the Gate’s ‘ foundations is that nothing they do works or makes a damn bit of difference anywhere . Fact is about the only thing the two foundations do accomplish is to promote both the Gates and Buffet’s public media image in their quest to appear altruistic and caring as they sell us all down the tubes to their own benefit .

Sigh … what the US needs now is a 21st century Teddy Roosevelt .. desperately

Slyynnnns

Apr 19, 2017 at 2:32 am

Gates is an ideas man – not the same as a financier. As fun as the billionaire bashing is, Gates is much more of a class act. The foundation he and his wife set up are doing actual work in Washington State (among their other, global initiatives) to provide housing to homeless families and support education for children. Not too shabby when you bother to do 20 seconds or internet research.

I agree that some foundations can seem like a front – but Gates is genuine in his philanthropy when you examine the foundation’s projects and successes.

Their “foundation” is a self serving conduit no different than the other family foundations like Ford and others.

intosh

Apr 18, 2017 at 10:23 am

Great comment.

The ignorant MSM-consuming masses are always conned to blame and to venerate the wrong people.

Kit

Apr 18, 2017 at 1:05 pm

Woah, I’m sure some idiots are blaming people, but the more fundamental thing is that we are competing for land in areas with a lot of economic power (good land, good jobs). You can’t fault anyone here: the foreign money wants somewhere safe to be, some foreigners are legitimately moving here for a better life, sellers just want to move on with their lives, and greedy people will be greedy. I wonder if the new game is bouncing around mid-sized cities to avoid all this inflation.

Hiho

Apr 18, 2017 at 1:52 pm

You are totally and utterly wrong. It’s not about scarcity or competition for scarce lands. The name of the game is a debt—fueled—ponzi—scheme. You should follow the work of Michael Hudson in order to understand what is really driving the prices up.

JZ

Apr 18, 2017 at 2:45 pm

If you are so sure of prices going up in this ponzi, then why won’t you bet all you have and take some big positions and get rich like Warren?

I agree with both the theory of limited resource and debt ponzi. Both are true to some extent.

Blaming Warren because you will lose money to him on the poker table only make you a bad loser.

I respect Warren, and I know i will lose all Onhave if i sit on the same poker table playing this ponzi.

What I do NOT respect is the guy who created the casino and forces me to sit down with Warren. That is, you have guessed it, Federal Reserve.

HIHO

Apr 20, 2017 at 2:48 am

JZ, well the answer is simple.

I do not have the capital, nor the same easy access to credit, nor the privileged information, nor the needed political connections to get bailed-out once the bubble bursts.

I will tell you a secret, there is no such a thing as a perfect market. You are welcome.

Mary

Apr 18, 2017 at 2:19 pm

I’m struck by the level of righteous anger commenters are directing at Buffet. He’s head of a (publicly traded) business empire. It’s his responsibility to legally maximize profits. While Buffet projects a nice-guy facade, he is not your daddy and it is not his job to take care of you.

You don’t like the way Big Business works? Regulate it!

JZ

Apr 18, 2017 at 2:37 pm

Please at least think one step further if you want to play chess with these “BIG” businesses.
they love regulation. The more regulation you have, the more barriers for small guys to compete and the more corruption deals that will make with Washington.

economicminor

Apr 18, 2017 at 11:21 pm

“You don’t like the way Big Business works? Regulate it!”

You have to be kidding! As if We the People have anything to say about what happens in Washington DC… It is a swamp full of swamp creatures who run on money from the Warren Buffets of this world.

Righteous Anger! I think we haven’t reached the righteous anger part yet but the way things are going we will get there.

” It’s his responsibility to legally maximize profits.”

And that is a problem when there really aren’t any real regulations or penalties isn’t it. I guess it will stop when the golden goose has been thoroughly devoured.

Hiho

Apr 19, 2017 at 10:04 am

That is bullshit. A mafia don could say the same, his only responsability being to maximize profits. What is legal and what not, it’s a matter of circumstances after all. Keep in mind that these gangster (Buffet, Soros) use their power to change the regulations at their will. Your shitty statement gets even shittier once you realize that they can change the rules of the game.

And yeah! That is exactly what we want. To regulate again this faux free for all arena where we the little people are subject to free market discipline while the big guys are protected by the state and bailed out when needed.

the odds are that you are not on their side, regardless of what you thing. Keep paying your taxes little man and repeating this dogmatic propaganda, uncle Warren et al will demand another bail out soon.

intosh

Apr 20, 2017 at 3:02 am

“It’s his responsibility to legally maximize profits.”

Oh pleeease. If the legal bounderies are set directly or indirectly by these barrons for their own benefit, what legitimacy does your “legal card” really have?

Maximus Minimus

Apr 18, 2017 at 5:33 pm

This is a valid point. It is not the Chinese fault if the elected leaders allow, and the businessmen facilitate money laundering. They just use whatever lax laws the governments choose to enforce.

interesting

Apr 18, 2017 at 1:24 am

“It isn’t a ‘free’ market like in the USA”

its’ only a free market for those that get bailouts……Like Uncle Warren.

Gershon

Apr 18, 2017 at 8:58 am

Just another day in the oligarchy.

MC

Apr 18, 2017 at 3:50 am

I suspect this is an attempt to fight that weakness at the top we’ve seen over the past year or so, with mansions in the Hamptons going unsold or for considerably lower prices than they were originally listed.

The houses listed on Juwai.com are not merely very nice: they are downright palatial and with price tags to match. I’ve browsed through their inventory and the cheapest house I could find was six and a half million dollars. I am sure there are cheaper ones, but my head starts spinning when I see the dollar sign followed by too many zeros.

This is a completely different market from Vancouver or Sydney. BH is not marketing to merely wealthy people wanting to get their money out of China: it’s marketing to the very top 1% of the Chinese society, if not the 0.5%.

I know this will sound strange to many American readers, but it reminds me on a far larger scale of what happened here in Europe after 2005. Back in those days our luxury RE agencies started marketing with a vengeance to Russian and Kazakh millionaires to start fighting a slight weakness at the top caused by, as my mother says, “there are only so many billionaires around”.
I remember seeing these millionaires, or to be more precise their convoys: usually an armored Mercedes or BMW sedan in the middle escorted by at very least two full-size SUV’s packed with security people, often former special forces. The richest signalled their status even further by having their vehicles registered in Germany through front companies.
What happened to them? They disappeared, and long before the Ukrainian Civil War started. Apparently the Kremlin got serious about capital controls, like China keeps on threatening to do. Of course you can still get your money out of Russia, but it requires either a far bigger cut to be paid in bribes or for you to be very close to the top ranks of the government. Ordinary oligarchs need not to apply.

BH has had a good idea: their investment is quite limited and the payoffs potentially huge. Should Beijing finally get serious about capital controls they stand to lose nothing more than whatever money they paid Juwai.com. Unlike the whole RE industry on the Anglo-speaking Pacific Rim.

prepalaw

Apr 18, 2017 at 7:54 am

I bought and managed large US farms and forest lands for wealthy Germans in the 1980s. This was a trendy investment for Germans at that time. Most bought at the top of the market.

The land never left the US and was operated as usual by US farmers and foresters. Eventually, after a decade or more, the original purchasers died and their heirs sold off the properties.

I was also involved in buying and managing apartment buildings and factories for the same people. Farmland and forests are pretty much self-sustaining. But, buildings are wasting assets and require maintenance and repairs and tenants. Those people, who bought buildings in a good location were rewarded with capital appreciation.

In the end, no one local cared who owned the properties. Use is everything and the locals were the people who rented and occupied the properties.

Gershon

Apr 18, 2017 at 8:02 am

“If you wanted to understand a politician you mustn’t pay too much attention to his speeches, but find out who were his paymasters. A politician couldn’t rise in public life…unless he had the backing of big money, and it was in times of crisis like this that he paid his debts.

The great corporation which employed you lied to you, and lied to the whole country—from top to bottom it was nothing but one gigantic lie.”

Upton Sinclair

Meme Imfurst

Apr 18, 2017 at 8:09 am

The crowd loves to rub up against ‘success’, may be some will rub off who knows. The ‘respect’ that Buffett has is only because the media and Politians know where the butter is not because there is honor and justice.

Were it not for his cozy relationship with the last administration, he never would have gotten Wells Fargo and thus free access to the Fed’s money window. Why he and his company never got in trouble for the mobile home racket, credit cards, questionable foreclosures, EPA violations, and more is a mystery only a Politian can explain.

Fat, sugar, salt from his food enterprises make up the rest of his healthily ‘award winning reputation’ that and sending oil on his train to Canada and back without loading or unloading one ounce of oil forty some times a year, so he can get the government subsidy coupon in the millions per year ( what happened to the one that turned over and oil everywhere…nothing)..

You try doing any of these things and watch how FAST the blinded left stomps on you ( think about that: fat, sugar, salt, poor health, low income folks trailer racket, the 1%, the 0.5%, special favors, credit card frauds, questionable mortgage foreclosures, etc. all the things decent people hate and scream about yet praise him). YES…It pays to keep the butter sitting on the table. He gets not a dime from me.

As for the Chinese, Smithfield foods is now crap, tough, chewy pork products. How about the media…Lionsgate and many other film companies are now China owned. We are selling out America to the highest bidder regardless of what nation or multi national conglomerate is involved. But isn’t that the whole idea, globalism? Or is it stealth slavery? Owe your soul to the company store.

RD Blakeslee

Apr 18, 2017 at 8:12 am

“In the end, no one local cared who owned the properties. Use is everything and the locals were the people who rented and occupied the properties.”

This truism is why communism succeeds, for awhile. “If the government owns it, who cares? Am I housed? OK, that’s enough for me”.

Trouble is, the enterprising spirit of people like Buffett is not in government, innovation atrophies and society decays.

Like the tale of the tourist to the Soviet Union: When told by the tour guide that “houses are free here” and asking what was that line of people over there, the guide said “Oh those are people waiting for houses. We don’t have any right now”.

So, Winston Churchill said “Democracy (which I assume he meant an elected representative republic with quite a lot of liberty for ideas and action of its citizens) is the worst form of government in the world, except for any other.

Hiho

Apr 19, 2017 at 12:36 pm

Nice try, but we don’t live in democracy right now. There is some formal democracy, true, but without any substantial content. So, to be fair, you should compare 2 different kinds of oligarchies.

Casino capitalism is not the system which has allowed the west to develop. And it goes without saying that it does not go hand by hand with a true democracy.

We don’t have a democracy anymore and our current economic system is a travesty of the real industrial capitalism. Following the same idea, I do admire true enterpreneurs who invest to create tangible goods and services, but buffet and the like, are just parasites who got rich merely by means of rent extraction and plain theft. Their activities are not even a zero sum game, they are in fact a negative sum game.

Wilbur58

Apr 18, 2017 at 9:09 am

Question on a complete tangent:

For publicly traded companies, what entity tracks the common share ownership?

For example, let’s say the stock market screeches to a halt on 4/18/17 and there will be no trading on any exchange in any nation for months. Company A has one billion of common shares out there in the public domain and has for many years. Who owns those shares?

You bought everything you’ve needed from Walmart’s Chinese manufacturers and Chinese investors are buying real estate, etc. in the US.

You been buying meddle east oil from your local gas stations and Arabs are buying US war corporations’ weapon systems and US real estate.

This is a very nice, equitable arrangement, don’t you think? Whatever you do, don’t meddle with the forces of Mother Nature! Instead, just go to work, buy some shares of stock to expand your portfolio and everything’s going to turn out just fine. Take my word for it.

R Davis

Apr 18, 2017 at 11:01 am

Now just wait a dog gone cotton picken minute here.
Are we, or are we not, going to war with China !
How is that gonna work out that .. Buffet is gonna sell US real estate to a country that the president is waving a war stick at.
Besides China have spent all the loose change they got, buying up bricks & mortar here in Australia.
Why there isn’t a square inch that they don’t own here.

Uncle BlingBling

Apr 18, 2017 at 12:51 pm

Correction: There isn’t a square in that isn’t mortgaged for 100 years or more.

Lee

Apr 18, 2017 at 4:21 pm

Well they don’t own my house yet, but for a nice price over the current value I’d sell IF I had another place just as nice to buy……….

That’s the problem here in Oz.

If you sell you still need another place to live.

With all the transactions costs including taxes, fees, moving costs, etc, etc, the net result is that you really don’t make much or have much leftover UNLESS you sell one of those nifty multi-million dollars shacks near the CBD and move to Woop Woop where the price of housing maybe cheap.

Just the other day a small unit on a block of land the size of a postage stamp (196 sq meters) in the village sold for A$400,000. Nothing special about the unit and it was at least 25 years old.

That is a Japanese size block of land and IMO what is a crap housing unit.

Geez, you can buy a one bedroom apartment near the beach in Japan for A$15,000…………

Unreal.

R Davis

Apr 18, 2017 at 11:04 am

If there is war .. it will be a lot of Chinese residents in the US in internment camps .. is all.

DH

Apr 18, 2017 at 7:03 pm

I’m under the impression that many of these Chinese owned homes are uninhabited.

Your Good Friendq

Apr 18, 2017 at 8:45 pm

This is true. And they’re all financed. The feel good narrative that they paid cash is a complete myth.

R Davis

Apr 18, 2017 at 11:11 am

Due to the migrant / refugee / immigrant crisis in the European Union .. Europeans are leaving their home lands to resettle elsewhere .. an exodus.
They will bring skills & means & their whole family & extended family.
Ask around & see .. it would be a good thing if they were factored into the real estate market equation .. as real money purchasing real .. real estate & not mickey mouse dreams.

Lars

Apr 18, 2017 at 11:32 am

Most interesting, Wolf !!!
In my conclusion to the “Bush Real Estate Scam: I and II” (2010), it was surmised that:
“This time I’m forecasting that the Insiders will likely sell these properties to the next wave of immigration, probably Chinese ‘key employees’, along with all of their arriving extended family. When Chinese industry builds factories here, like the Japanese did with building Toyota car assembly plants etc, they will then be ‘importing’ those Chinese people fleeing the coming recession in China, when America has no more money to buy things from China anymore. The US Government will have a political agenda to ‘ship jobs back home’, which might be 5 years away still. Come work for us in the USA, we’ll handle all your paperwork and include a 5 bedroom house, then deduct it from your salary (at an inflated price from what we paid for it in the foreclosure action, of course ! ).”

In Bush I they criminally exploited the appraisal process and criminally overvalued the properties. (ca. 1988-1991)
In Bush II they criminally exploited the borrower process and criminally overvalued the borrowers’ creditworthiness. (ca. 2002-2008)

George McDuffee

Apr 18, 2017 at 6:39 pm

An excellent example showing why the old simplistic supply-and-demand domestic socioeconomic models are no longer operational in this era of “financial engineering,” corporationism, and globalization. We continue to believe in these palio-economic myths at our [considerable and increasing] peril.

michael Engel

Apr 18, 2017 at 6:42 pm

Buffett became a signal.
At age 86 he behave like a teenager, preparing a stunning story,
trying to impress to shock, a beautiful woman, on a date.
Mr. Buffett, don’t show up on the 3 hours CNBC special,
it is a mistake.

Mr. Buffett, fade away like an old soldier, so your magic can stay !!!

Sllynnnnns

Apr 19, 2017 at 2:57 am

Until we demand regulations (yes, some lovely regulations!) that prevent housing from being treated like a global asset class, the average American will forever be at the whims and mercy of the global rich. It’s a national security issue.

You can’t build your way out of a global demand for Bay Area or Vancouver housing, for example. The demand globally is just too vast. How many millionaires are there in China alone? Enough to destroy the affordability of our cities through housing speculation.

And once another investment becomes more lucrative, money will flow out of housing and leave devastation. It is harming people now who must move when rents rise and they can’t find affordable housing. Housing is a necessity and its lack impacts local businesses as well as the population. Speculation is a privilege and can be revoked.

We should demand regulations like Vancouver has had the balls to implement. Reduce vacancy, reduce foreign and domestic speculation, reduce incentives to own multiple properties, do not reward home buying with any form of residency /citizenship or protections. Many countries don’t permit foreigners to buy land at all. It’s not unheard of to restrict a necessary resource like housing for the good of the citizens and local communities. The time for subtlety is past.

I feel like I should start praying to the almighty FED to raise rates and quit f*ing over those of us who have diligently saved and are left chasing risky assets for a return of some kind.

George McDuffee

Apr 19, 2017 at 9:23 pm

!!!!!

Want to retire early

Apr 19, 2017 at 5:13 pm

I have a 1600 sq. ft. townhouse in a west-side Portland, OR suburb. Normal price would be ~$275K.
How much more would a buyer from China be willing to pay?
Does Berkshire Hathaway list modest properties like this, or are they only into the high-end properties?
If they don’t list this type property, who would do it?

Thanks!

Snake Slayer

Apr 19, 2017 at 8:12 pm

Dump it while you still might find a buyer.

Kenson

Apr 19, 2017 at 9:57 pm

Is this just for the upscale market or can anyone market their home directly to the Chinese? Seems that most Chinese are compulsive speculators.

If the Chinese think the Yuan will sink then several modest homes in Kansas will be just as good a hedge as one large LA palace.

Thinking of painting my house red and brushing up on my Mandarin.

mean chicken

Apr 20, 2017 at 7:31 pm

Ain’t globalism just grand, giraffe habitat be damned!

LeClerc

Apr 21, 2017 at 1:49 am

China is big, very big. The Law of Large Numbers applies to the supply of rich people there. There are many of them.

Chinese cities are filthy and crowded, and rich Chinese are barely, if at all, Communist. The valuable byproduct from this mixture is called ‘flight capital.’

Our clever financiers are harvesting flight capital. The downstream effluent from this process is runaway RE inflation. Neighborhoods are then financially poisoned the way others are chemically poisoned with coal ash from power plants.

@Slyynnnns: Nonsense. Just search on Bill Gates and demonetization. Even India knows better than to think Gates is a real philanthropist. Search through some articles from Times of India (not exactly a socialist rag) and you’ll see someone quite different to the person you think he is.